How to Buy Stocks for Beginners

Buying stocks is not complicated, although it can be intimidating because of the number of brokers, online apps, and stocks. 

What is a Stock?

Historically, it was a certificate that represented ownership in part of a corporation or a share. Every share entitles the owner to a percentage of the corporation’s profits and assets. Corporations sell stock to finance company operations and other purposes.

The Basics of Buying and Selling a Stock

Sellers set an asking price for the shares they are selling, and buyers bid by setting the price they are willing to pay. Then, brokers route trades to exchanges, and the exchanges match the buyers and sellers. 

How to Buy Stocks for Beginners

Selecting a Broker

There are four general categories of brokers: full-service brokers, discount brokers, Robo-advisors, and financial advisors. All brokers are online now, and some still have brick-and-mortar storefronts in specific locations.

How to Buy Stocks for Beginners

Doing the Research

If you are doing your research, the best place to start is to use a stock screener. For instance, if you want to buy stocks with a dividend yield greater than 3%, you enter the criteria, and the screener will provide a list. 

How to Buy Stocks for Beginners

Place the Trade

Once you know the stock you want to buy, you must place the trade, which entails buying a certain number of shares at the price you want to pay.

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